Exhibit 99.1

FOR IMMEDIATE RELEASE                                           October 31, 2001

CONTACT:          Donald L. Rich, President & CEO             408-852-8000

Castelle Reports Third Quarter 2001 Results:

MORGAN HILL, Calif., October 31, 2001 - CASTELLE (Nasdaq: CSTL) today announced
financial results for the third fiscal quarter ended September 28, 2001.

Net sales for the third quarter of fiscal 2001 were $2.6 million, an increase of
$189,000, or 8%, sequentially, but a decline of $1.1 million, as compared to the
$3.7 million in the same period of fiscal 2000. The Company recorded net income
for the third quarter of 2001 of $53,000, or earnings of $0.01 per share, on a
fully diluted basis, compared to a net income of $240,000, or earnings of $0.05
per diluted share, for the same period in fiscal 2000. This compares to net
losses in the first and second quarters of 2001 of $408,000 and $268,000, or
$0.09 and $0.06 per share, respectively, on a fully diluted basis.

Net sales for the first nine months of fiscal 2001 were $7.3 million, compared
with $11.6 million for the same period of 2000. Net loss for the nine-month
period was $623,000, or $0.13 per share, compared to a net income of $620,000,
or $0.12 per diluted share, for the 2000 period. The loss for the nine months of
fiscal 2001 included non-recurring charges of $243,000 for expenses associated
with the reduction of work force and the write-down of surplus assets. Excluding
these non-recurring charges, the net loss for the period would have been
$380,000, or $0.08 per share.

Donald L. Rich, President and CEO, stated, "We are pleased with our sequential
increase in revenue and return to profitability this quarter. Cost-reduction
programs, implemented earlier in the year, are on track. These programs have
allowed us to operate more efficiently during this period of economic
uncertainty, while we continue to invest in engineering and new opportunities.
Our continued focus on spending, inventory control and collection of receivables
have provided improvements to our cash flow."

About Castelle
Founded in 1987, Castelle develops and markets products that enable
organizations to easily implement Internet and Intra-office messaging, data
storage and printing over local area networks. Castelle is one of the pioneers
of application server appliances and has developed expertise to integrate most
complex functions into very easy-to-use and maintain, "plug-&-forget" shared
devices. Castelle believes that its products are more economical than comparable
software-only solutions, as they do not require a large technical staff to
install, operate and maintain. Castelle products are utilized by industry
leaders including Fortune 1000 companies and also by small and medium-sized
business worldwide and are available through a worldwide network of
distributors, value-added resellers, systems integrators, e-commerce retailers,
and the Castelle On-Line Store. Castelle is headquartered in Morgan Hill,
California and can be reached at 408-852-8000, fax 408-852-8100 or
www.castelle.com.

Forward-Looking Statements
This press release contains forward-looking statements that involve risks and
uncertainties, relating to the future events, including the effect of the
economy on the Company's performance and ability of the Company to (i) be
profitable, (ii) sustain revenue growth, (iii) develop, introduce and achieve
acceptance of new products and (iv) be cash flow positive. Actual events or the
Company's results may differ materially from the events or results discussed in
the forward-looking statements for a number of reasons including, without
limitation, the timely development, acceptance and pricing of new products and
the general economic conditions as they affect the Company's customers. The
Company assumes no obligation to update the forward-looking information.
Investors are referred to the full discussion of risks and uncertainties
associated with forward-looking statements as contained in the Company's reports
to the Securities and Exchange Commission, including the Company's Form 10-K and
Form 10-K/A for the fiscal year ended December 31, 2000.

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